Lease Accounting for the Transportation and Logistics Industries

Lease accounting for the transportation and logistics industries will change with the new standards. Transportation and logistics companies lease a diverse range of assets from storage units to airplanes and ships.

The new leasing standards will require transportation and logistics companies to update their accounting policies based on the new principles. In some cases, extensive analysis may be required to arrive at judgments on how to apply the standards to certain lease types.

Key Considerations

1. Does an agreement for partial use of a transportation or storage asset constitute a lease? Consider arrangements such as an agreement for shipping capacity or oil tanker capacity.

2. How will complex terminal leases at airports be affected by the new leasing standards? What about terminal subleases? Consider the additional lease components in a terminal lease such as moving rails and boarding ramps, as well as non lease components such as landing rights.

EY explains how FASB's new lease accounting standards will affect the airline industry in their "Technical Line" publication. This includes changes to financial reporting, lease classification, and more.

The article form Moss Adams discusses the impact of the new lease accounting standard on transportation and logistics companies as well as how companies in this industry can best evaluate their leases under the new standard.